Fixed-indexed annuity sales continue to soar, reaching $20 billion in sales in the second quarter, a 14% jump over the previous year, according to the LIMRA Secure Retirement Institute.
In the first six months of 2019, fixed-income annuity (FIA) sales were $38 billion, an increase of 18%, compared with the first six months of 2018, the report said.
Fee-based FIA sales were $193 million in the second quarter, up 188% over the prior year, but still representing less than 1% of the market.
Todd Geisling, annuity research director at LIMRA SRI, said the totals represent the highest quarterly sales for FIAs ever. “Despite declining interest rates, we are forecasting the current momentum of FIA sales to continue through the end of the year and expect sales of FIAs to exceed $70 billion for 2019,” he said in a press release.
LIMRA said total annuity sales also hit a high of $63.9 billion in the second quarter, up 7% from a year ago. This is the highest quarterly sales recorded since the first quarter 2009, and the third consecutive quarter where total annuity sales surpassed $60 billion, LIMRA said.
Year to date, total annuity sales were $124.8 billion, an increase of 11% from a year ago.
Among providers, AIG held on to the top spot with $7.4 billion in second-quarter fixed-annuity sales, followed by New York Life with $5.8 billion and Global Atlantic Group with $5.1 billion. AIG also had $2.8 billion in variable annuity sales.
Fixed-annuity sales have outperformed variable annuity sales in 12 of the last 14 quarters and they represent 60% of the total annuity market, the report said. After two consecutive quarters of declines, variable annuity sales were $25.8 billion, level with second quarter 2018 results. For the first six months of the year, variable annuity sales were $48.6 billion, down 4%, compared with prior year results, LIMRA said.
Fixed-rate deferred annuity sales rose 10% in the second quarter to $13.1 billion. In the first six months of 2019, fixed-rate deferred annuity sales totaled $28.2 billion, 35% higher than prior year's results.
Single-premium immediate annuities (SPIAs) sales totaled $2.7 billion, up 8% from last year. Year to date, sales were $5.5 billion, 20% higher than prior year.